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Ruidoso approves higher water rates

By Dianne Stallings

dstallings@ruidosonews.com @RuidosoNews on Twitter

Posted:
02/13/2014 10:39:32 AM MST

With a few last-minute changes, including adding another dollar to the minimum monthly charge for water, Ruidoso village councilors unanimously approved new rate schedules for residential and commercial customers.

The action Tuesday came after months of council review and years of work by a consultant. During the public hearing, no one from the audience commented on the increases.

Councilor Denise Dean took the lead in the discussion and offered the eventual motion for approval, which passed unanimously. Dean and Councilor Gloria Sayers a few weeks ago convinced other councilors to stop passage of the rates, asking for another look at a tiered commercial approach and because some pages were missing from the ordinance posted on the village's website.

"After doing calculations on different businesses to see the impacts as far as these rates, and I thank Councilor Sayers for her assistance, I think we have the residential side nailed down where it is reasonable, but strives for conservation," Dean said. "We were still struggling with the commercial side. With (Sayers' suggestion of a tiered charge for commercial use) we went back and did recalculations. Instead of looking at a flat $7 rate per thousand gallons, how it would impact our 500 commercial customers going back to a tier system. It would be a little more fair, plus promote conservation."

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Based on her calculations, Dean suggested that instead of the proposed $7 flat rate per thousand gallons over the 3,000 gallon minimum for commercial commodity use, the village impose a $6 rate per thousand gallons for any commercial account that uses 3,001 gallons to 50,000 gallons. A charge of $7 per thousand gallons would be imposed for 50,001 gallons to 250,000 gallon usage. Any amount more than 250,000 gallons would cost $8.50 per thousand gallons.

"That brings us back to the level when surcharges (now eliminated) kicked in for summer, but still is feasible for those using a lot of water and they will not be charged less than they were previously. I figured with the $6 rate, we would cover the $5.75 cost to the village to produce a 1,000 gallons of water," Dean said.

She also asked councilors to consider adding another $1 to the minimum monthly charge of $27 recommended by the consultant, bringing it to a flat $28 for residential and commercial customers.

Although the chart listed the commercial minimum at $25.06, Dean said commercial users are paying $27.73 as a minimum now and $27 would represent a decrease. A dollar more would solve that situation.

"For the first time I have to agree with everything you said," Councilor Lynn Crawford said. "I do like the $6 and I know that we need to revisit it in a year."

Reviewing information about ensuring rate increases are legal, Crawford said the criteria is that a utility rate charge by a municipality must be, "fair, reasonable and just, uniform and nondiscriminatory. At the end of the next sentence it talks about it may not discriminate in charge between those similarly situated. I think this doesn't violate that at all."

Village Attorney Dan Bryant said prior to the latest version suggested, the proposal was to deviate from the consultant's recommendations and charge a segment of customers at below the village's cost of producing the water. "I think that was a red flag when you were charging everyone else more than the cost of production," he said. "When we get to the $6 charge, we know our cost to produce is $5.75, so we know we are covering that and banking some cash for improvements, contingencies and emergencies and those kinds of things, so I'm significantly more comfortable with the uniformity."

He warned councilors to expect some complaints about the new rates. "We need to be effective in terms of our education and outreach on how all of this works together, and be open to fine tune it, if there is a glitch and this hits someone harder than we anticipated," Bryant said.

Sayers said she was glad for the extra time and that some dramatic changes were inserted.

A good rate design is inherently fair and reasonable, because charges are based on the strain each customer classification imposes, she said. "Higher users pay more, which is how conservation works," she said. "I think this is a great compromise. It's not perfect. There will be problems and complaints, but it is a great start."

Having rates where the village isn't losing money on every 1,000 gallons of water treated looks better when local officials are searching for money from state agencies, Crawford said. They can have more confidence in the village's financial stability, he said.

Councilor Joseph Eby said when he was talking to different business owners, some saw the increases as penalizing businesses that are successful, but when he reviewed the rates with them, they saw the impact was minimal.

"I agree going with the tiered approach will help those on the lower usage," he said. "I think they will be happy about that and it really doesn't change the higher end that much. It's a good first step. We're moving forward, but not hurting our businesses."

Sayers thanked Dean for taking the time to "crunch the numbers," and verify the impact.

Dean went over mostly typographical errors to be corrected and Sayers noted that under Phase 5 water use restrictions, the most severe category, drip irrigation should be listed as prohibited along with sprinkler systems.

Sayers also pointed to the notation that within six months, the village will initiate an incentive program for water conservation.

"This is one of the two things I really wanted and insisted upon since the beginning of this," she said. "A start for the village and the community to work together on a conservation effort."

Bryant said he noticed on a recent trip that in Santa Fe, besides installing 1.6 gallon toilets to use less water, a differential lever was introduced that moves up to flush liquid and down for solids. He checked the impact and the system reduced the volume of water used by about 20 percent to 28 percent, he said.

"We ought to pay attention to that in our incentive program," he said. Some ski areas also have abandoned water use for commodes and are using self-contained recycling systems, he said, adding, "I'm impressed by what has happened in the (related) technology."

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